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Why doesn't Britain make things any more? (2011)

theguardian.com

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Re: Why doesn't Britain make things any more? (2011)

#41

Post by pjc50 »

> Pearson Engineering's Tom Clark has a good story about how the firm's previous owners used to handle industrial relations. Every time the workforce went on strike, which was often, one of the Pearsons would buy a new Rolls-Royce Silver Cloud and drive through the picket line, waving two fingers at his own staff.

That does rather sum up 1970s industrial relations. Can you imagine managers like that implementing the Toyota Production System? Or anything else where the workers have an individual autonomous contribution? Of course not. So that's why the remaining large car factories are foreign-owned.

What has survived and flourished is the small high tech manufacturing industry - McLaren, satellites, etc.

Re: Why doesn't Britain make things any more? (2011)

#42

Post by neilwilson »

afarrell wrote: post #16
IllogicalLogic wrote: post #15

Earlier quoted context omitted.

Once the pound became the global reserve currency, the trade deficits started increasing. I expect the same was true for the US. Does this inevitably lead to less domestic manufacturing? I think that's the outcome, yes. This is the case for a global reserve currency that isn't controlled by any single country.

But doesn’t this also mean that as a country, Britain or the US can “tax” the economic growth in an arbitrary country which uses its currency as reserve? As Botswanna’s economy expands, it needs to print more money to conduct all the transactions and take advantage of the increased resources provided by an increasingly-skilled workforce. As that country’s central bank prints more money, it tries to acquire more GBP o…

Largely you are correct. It works like this.

If you are a net exporter, you are essentially giving away your own output to a foreign nation in exchange for bits of paper. The reason you can't spend that paper is that it would destroy your exports (your own currency would go sky high as the system tried to eliminate the imbalance) and you'd have to find something else for the people working in exports to do, or you'd get a Dutch Disease problem internally (and likely end up in a situation like Venezuela)

So Botswana sells its natural assets to the US in exchange for US dollars. Those US dollars find their way into the bowels of the financial system and are discounted into the local currency. Either directly - like the Chinese do, or indirectly via some fancy financial system (normally a Sovereign Wealth fund, or Pension schemes with compulsory contributions). They then sit there (the Norwegian fund for example cannot spend anything - ever) - largely to avoid a Dutch disease in the country and to stop the local currency appreciating against the export target.

The result is that the rich countries get stuff essentially for free from the poorer countries so that the poorer countries can issue their own money without people getting agitated.

The whole thing is a conjuring trick. The poorer country would be better putting people to work creating domestic infrastructure straight away and only exporting what is necessary to get needed goods and services required to create that infrastructure. But to do that requires you to operate the central bank in a way that appears 'wrong'. You have to issue liabilities against 'Other Assets' rather than 'US Treasuries' and that upsets people who don't understand how banks actually work.

The GBP/USD gets 'locked' in the financial system. Because it is being used to discount to the scrip used locally you can never get rid of it. To do so would reveal the central bank illusion and explain how the trick is done. Then people might start asking question like: why don't we use our own money in our own circulation to ensure everybody has a job and solve unemployment permanently and forever? And that would never do ;-)

Re: Why doesn't Britain make things any more? (2011)

#44

Post by emmelaich »

IllogicalLogic wrote: post #27
H8crilA wrote: post #4

Earlier quoted context omitted.

It's perhaps inevitable. The Chinese, then the Dutch, then the British, now the American. It may simply be that China becomes the next top power. Ray Dalio on the matter: https://youtu.be/Mh0vEaac78U

The only reason China dropped out of super power status was tremendous sabotage/criminality by the top 5 economies of the world. There rise is not a fluke, this is an inevitability of the planet we live on, India is next and it will outperform China by the end of this century (like it did in the past, pre-British invasion). General ignorance of world history in the West will make this transition harder than it needs…

The biggest saboteur of the Chinese economy was Mao.

If you're going to pin this on the west, then pin it on Rousseau, not (say) Adam Smith.

Re: Why doesn't Britain make things any more? (2011)

#45

Post by lostdog »

goatinaboat wrote: post #23
sleavey wrote: post #17

All of the main parties in the UK keep skirting around the start of the solution to "rebalancing" the economy: massively increased taxes on the rich to pay for the required investment. This is not a new idea; low taxes for the wealthy are a relatively modern phenomenon yet the social mobility gap has been getting wider. There is surely enough support for it among a properly informed plebiscite, but they are never giv…

That’s one possible approach. The one I favour is a total moratorium on new building work in the South East. That’s the only way to force both workers and companies to look to the North. The problem with “tax the rich” is that the numbers of truly rich are tiny and you could swallow their entire fortunes and they’ll be gone in a week. Exercise for the reader, how long would Richard Branson’s entire wealth run the NHS…

All together, UK billionaires have 156 billion pounds [1]. Put a 4% wealth tax on that, and you'll get 6.25 billion pounds. You won't even be making their fortunes smaller, so you could take that amount for forever.

The NHS spent 140 billion pounds in 2017 [2], so you would cover 4.5% of the NHS budget just with this wealth tax. That's not insignificant, and we're just looking at billionaires here.

UK millionaires own 6.5 trillion pounds [3]. With just a 3% wealth tax, we raise 195 billion pounds, which is a lot more than the NHS budget.

So yes, since Richard Branson is not the only rich person, you can tax the rich, let their fortunes still increase by 1% per year, and fund the entire NHS and more.

[1] https://en.wikipedia.org/wiki/List_of_British_billionaires_b... [2] https://www.bbc.com/news/health-42572110 [3] https://www.coutts.com/insight-articles/news/2017/how-many-m...

Re: Why doesn't Britain make things any more? (2011)

#46

Post by fmajid »

The UK’s big problem is low productivity, whether in industry or services, and it takes good management, worker training and the judicious application of capital to fix. The financial sector sucks up the best and brightest, leaving only the second-class going into industry, in a form of Dutch disease.

Re: Why doesn't Britain make things any more? (2011)

#47

Post by sharpneli »

IllogicalLogic wrote: post #27
H8crilA wrote: post #4

Earlier quoted context omitted.

It's perhaps inevitable. The Chinese, then the Dutch, then the British, now the American. It may simply be that China becomes the next top power. Ray Dalio on the matter: https://youtu.be/Mh0vEaac78U

The only reason China dropped out of super power status was tremendous sabotage/criminality by the top 5 economies of the world. There rise is not a fluke, this is an inevitability of the planet we live on, India is next and it will outperform China by the end of this century (like it did in the past, pre-British invasion). General ignorance of world history in the West will make this transition harder than it needs…

Bit more perspective. At the end of 1800’s and start of 1900’s China was still almost feudal agrarian society that didn’t modernise due to internal reasons. Neighbouring Japan had their Meiji restoration that made it a powerful modern country, that happily joined others in bashing China.

So at that point China was already decades behind Japan. After this came the Chinese civil war between Kuomingtang and the Communists, interrupted by Japan attacking again.

After the Communists won it spent the next 40 years shooting itself in the foot, again delaying its rise.

Comparable places like ROC (Taiwan) and South Korea have taken off like rockets economically, and are now great places in relation to their populations. China will be the biggest superpower if it reaches same production per capita as their non communist counterparts in Taiwan.

tl;dr: China mostly shot itself in the foot repeatedly. First Qing dynasty then commies, pushing them back over a hundred years.

Re: Why doesn't Britain make things any more? (2011)

#48

Post by exar0815 »

CapricornNoble wrote: post #37
viburnum wrote: post #11

Britain makes the best cars in the world, the problem is they only make a few dozen a year. All that hard work, just for Lewis Hamilton to lead a parade.

>>>Britain makes the best cars in the world Which ones are the those, the unreliable McLarens, or the unreliable (but at least beautiful) Aston Martins? https://www.youtube.com/watch?v=aGK7XPNFhpQ

He's talking about the Formula 1 cars. I think except of two teams all current teams are based in Britain (Ferrari and Toro Rosso). Even more, most of them are in a 50 Kilometer radius in the Midlands. And that has historical precedence. Since the beginning of the F1 World Cup, there has been only a single year when the Championship-Winning car was not either from GB or Ferrari.

Re: Why doesn't Britain make things any more? (2011)

#49

Post by sambeau »

CapricornNoble wrote: post #37
viburnum wrote: post #11

Britain makes the best cars in the world, the problem is they only make a few dozen a year. All that hard work, just for Lewis Hamilton to lead a parade.

>>>Britain makes the best cars in the world Which ones are the those, the unreliable McLarens, or the unreliable (but at least beautiful) Aston Martins? https://www.youtube.com/watch?v=aGK7XPNFhpQ

I assume the comment refers to Formula One racing cars

Re: Why doesn't Britain make things any more? (2011)

#50

Post by samlittlewood »

CapricornNoble wrote: post #37
viburnum wrote: post #11

Britain makes the best cars in the world, the problem is they only make a few dozen a year. All that hard work, just for Lewis Hamilton to lead a parade.

>>>Britain makes the best cars in the world Which ones are the those, the unreliable McLarens, or the unreliable (but at least beautiful) Aston Martins? https://www.youtube.com/watch?v=aGK7XPNFhpQ

Mercedes are in Brackley, UK. Ferrari, Sauber & Hass are the only ones outside UK. (I think Hass may have a UK facility as wwell)
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